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Informist, Friday, Jan. 23, 2026

MUMBAI – Assets under management of non-banking financial companies which specialise in gold loans are expected to surpass INR 4 trillion by the end of 2026-27 (Apr-Mar), according to a report by Crisil Ratings. The rating agency said firm gold prices will enhance collateral values, enabling lenders to scale up disbursements.

According to data by the Reserve Bank of India, loans against gold jewellery as of Nov. 28 were INR 3.59 trillion, massively up from INR 1.59 trillion a year ago. The total loans against gold jewellery in FY25 were INR 2.06 trillion. 

"The surge will be driven by elevated gold prices, a shift towards secured credit and an evolved regulatory environment, outpacing the CAGR (compound annual growth rate) of 27% clocked between fiscals 2023 and 2025." The AUM of these gold-loan specialised NBFCs is expected to see a 40% compounded annual growth rate between FY26 and FY27. 

Gold prices have risen over 68% so far in FY26 and were INR 151,700 per 10 grams in the spot market Thursday. In fact, the most-active February contract on the Multi Commodity Exchange hit an all-time high of INR 159,226 per 10 grams Thursday, tracking those on COMEX amid ongoing geopolitical tensions.

Other than firm gold prices, "demand for gold loans is also being underpinned by a shift among borrowers from unsecured to secured credit," said Prashant Mane, associate director at Crisil Ratings. Asset quality challenges in the unsecured lending space led to stringent underwriting practices adopted by lenders and stricter regulatory actions by the RBI. These factors led to low credit availability in the unsecured lending space, Mane said.

On Jun. 6, the RBI set a cap of 85% on the loan-to-value ratio for gold loans up to INR 250,000. For gold loans above INR 250,000 but below INR 500,000, the maximum loan-to-value ratio would be 80%. Gold loans above INR 500,000 are eligible for a maximum of 75% of the loan-to-value ratio. These new guidelines will be applicable from Apr. 1.  End

Reported by J. Navya Sruthi

Edited by Akul Nishant Akhoury

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